Fund Managers Cut Most Precious Metals Positions In Latest CFTC Data

(Kitco News) - Large speculators cut their net-long gold futures and options holdings on the Comex division of the New York Mercantile Exchange in the latest Commodity Futures Trading Commission data for the week ended Aug. 19, reversing some of the gains established in the last report.

The retreat came as geopolitical fears subsided and pushed the yellow metal under $1,300 an ounce during that timeframe. Platinum group metals activity was mixed, with large speculators adding to bullish palladium holdings and dropping platinum. These traders continued to trim net-long silver positions and cut their exposure in copper, too.

Metals prices were mostly lower during the time period covered by the latest CFTC report. Comex December gold fell $25.30 to $1,296.70 an ounce. September silver slid 42.10 cents to $19.412. October platinum dropped $32.70 to $1,439.50 an ounce. September palladium was the only metal to see prices rise, gaining $2.80 to $880.80. Comex September copper fell 6.65 cents to $3.088 a pound.

The addition managed-money traders made to their gold net-long position in the previous report was nearly wiped out in the current reading, returning their holdings to around July 29 levels. Their net-long position sits at 116,916 contracts. These traders cut 13,159 longs and added 3,635 gross shorts. Producers’ and swap dealers’ net-short positions fell as they both added gross longs and cut gross short positions.

The non-commercial traders in the gold legacy report reflected the disaggregated report’s money managers’ activity. They cut 11,385 gross long contracts and added 1,758 gross shorts. They are now net-long 152,817 contracts, near where their position sat on July 29. Commercials are net-short and trimmed that position by adding gross longs and dropping gross shorts.

Citi Research analysts said the drop in the managed-money accounts net-long position wasn’t a surprise, given that open interest for combined futures and options dropped 1.2%. The continued drop in open interest after the reporting period ended is “likely to be reflected in the next data release,” they said.

The analysts noted in the CFTC data regarding the U.S. dollar, net-long positioning gained 14% in the current report, which “suggests a bit of divergence as markets started to bull-up on U.S. dollar positions, which has really begun to weigh on gold prices despite a summer full of geopolitical heat in MENA (Middle East North Africa) and the Black Sea region.”

Managed-money accounts in silver trimmed their net-long positions on a combination of long liquidation and new shorts for the fourth straight week and this is the fifth week of position-reduction. They are net long 16,523 contracts, having cut 1,018 gross longs and added 5,964 gross shorts, pushing their net-long to the smallest since June 17. Producers and swap dealers both decreased their net-short positions by adding gross longs and cutting gross shorts.

In the legacy report, non-commercials cut 933 gross longs and added 6,074 gross shorts, dropping their net-long position to 25,984 contracts. This is the smallest since June 17. Commercials are net-short and decreased that position by adding gross longs and cutting gross shorts.

Managed-money accounts in platinum decreased their net-long position to 32,890 contracts by cutting 5,310 gross longs and adding 881 gross shorts. Non-commercials in platinum lowered their net-long position to 44,146 contracts in the legacy report, and did so by cutting 3,214 gross longs and added 138 gross shorts.

The drop in platinum net-long positioning highlights “the bearish sentiment surrounding Europe at the moment,” said analysts at Standard Chartered.